468+ Taxes & Levies Quick Commentary - TLQC 2633

A.   Background

This refers to the following TLQCs (in trail, blue, italic and after double line):

(a)   2628 of 2.2.24 about FBR Restructuring & Digital Plan: For & Against and KCV i.e. owing to IMF Loan conditionality as we understand, FBR Restructuring is likely to be made shortly, either by the Caretaker Govt or by the upcoming Elected Govt. Unless FBR is not free from corruption, these efforts may not be useful as per Mr Shabbar Zaidi recent interview whereby inter alia it is stated that about 16K officials (out of 23K officials) are just coming to office for corruption and he suggested solution about them, which you can watch in his interview.

(b)   2621 of 26.1.24 about Dr Ikram views on FBR Restructuring Issue.

(c)   2603 of 11.1.24 about FBR Restructuring Plan & KCV.

B.   Updated Commentary

Further to KQU 2535 of 28.11.23, being an Important matter, we would inform you about Govt of Pakistan Ministry of Finance issued notification of 2.2.24 regarding Implementation and Asset Distribution Committee for Restructuring of the FBR (Attachment 2633.1).

2.   Consequent upon the approval of the Federal Cabinet of FBR’s Summary for Restructuring and Digitization, the Minister for Finance, Revenue and Economic Affairs is pleased to constitute the following Implementation and Asset Distribution Committee (I&ADC) for follow up actions required for the restructuring of the FBR, in accordance with the decision of the Federal Cabinet, namely:

i.     Minister for Finance and Revenue (Chairperson)

ii.    Secretary, Law and Justice (Member)

iii.   Dr. Musharraf R. Cyan (Member)

iv.   Dr. Manzoor Ahmad (Member)

v.    Syed Nadeem Rizvi, Member Administration (Member)

vi.   Mr. Mukarram Jah Ansari, Member, (Legal & Accounting) (Member)

vii.  Mr. Afaq Ahmad Qureshi (Member, IR-Policy) (Member)

viii. Mr. Sajid Mehmood Qazi, Additional Secretary, Revenue Division (Member / Secretary)

3.   Terms of Reference (TORs)

The Terms of Reference (TORs) of the I&ADC shall be as follows:

The I&ADC shall be responsible for the completion and coordination of the following tasks within prescribed timelines:-

(a)   Providing technical content for formulation of statutory drafts to enshrine the core principles of operational autonomy and accountability of the tax administrations, separation of tax policy from tax administration, mandates of the oversight boards and mandate of the Federal Policy Board;

(b)   Monitoring the work of the sub-committees to resolve any disputes, expedite the drafting, review and approval of the legal instruments, and timely completion of their respective tasks relating to administrative & financial matters;

(c)   Issuance of necessary rules, regulations, notifications, Statutory Regulatory Orders, administrative orders and instructions;

(d)   Appropriate distribution of human resources and Assets between the successor Organizations and Offices;

(e)   Equitable distribution of available financial resources between the successor Organizations and Offices;

(f)   Obtaining any required approvals from Government to successfully implement the transition plan; and

(g)   Ensuring seamless transition of the FBR into its successor Organizations and Offices with appropriate legal & regulatory framework;

(h)   Performing any functions ancillary or in addition to the above as assigned by the Government, the SIFC, or any other competent Authority to implement the decision of the Federal Cabinet.

4.   Sub-Committees

The I&ADC shall have the following Sub-Committees for the tasks assigned to each: -

i.   The Legal Subcommittee: It shall comprise Secretary, Law & Justice (Chairman/Convener of Sub-Committee), Mr. Mukarram Jah Ansari, (Member Legal), Mr. Afaq Ahmed Qureshi (Member IR-policy), Ch. Muhammad Javaid (Chief legal) and Mr. Masood Akhtar (Chief Income Tax Policy) as its members. Its ToRs shall be as under.

(a)   Draft the required legislative instruments, amendments in Fiscal Laws and all relevant statutes. After completing all requirements for vetting & approvals, submit them to the Federal Cabinet and subsequently provide assistance for their enactment;

(b)   Draft necessary Rules, Regulations, Notifications, SROs, General Orders, Jurisdiction Orders after completing all requirements for vetting & approvals from the designated authorities, ensure their issuance in a timely manner;

(c)   Review and re-draft any existing procedures to align the same with the new legislation and ensure their smooth implementation; and

(d)   Perform any other function ancillary or in addition to the above.

ii.   The Finance and Administration Subcommittee: It shall comprise Mr. Ali Tahir, Special Secretary Establishment Division (Chairman/Convener of Subcommittee), Mr. Ahmad Shuja Khan (Member Audit FBR), Mohammad Imran Khan (DG R&A), Mr. Fareedoon Akram Shaikh (Chief-Admn), and Dr. Nasir Khan (Chief FBR) as its members. Its ToRs shall be as under:

(a)   Identify & enlist the details of existing financial resources, assets and HR pertaining to, or owned by the FBR (excluding those pertaining to IR & Customs formations individually);

(b)   Distribute FBR’s financial resources between the successor organizations having regard to their financial requirements and their human resources, ongoing projects and developmental needs

(c)   Distribute FBR’s physical assets and human resources among Revenue Division, Successor Organizations of Inland Revenue & Customs and related Offices, fairly & equitably, keeping in view their operational and administrative requirements;

(d)   Ensure the distribution in such a manner that it would not cause any disruption in operations and in the collection of duties and taxes of both Inland Revenue and Customs; and

(e)   Perform any other function ancillary or in addition to the above, as assigned by I&ADC.

5.   Other Matters

(a)   The above Committee and Sub-committees may co-opt more members (officers, legal and domain experts) with the prior approval of the Chairperson of the I&ADC.

(b)   The I&ADC or its subcommittees shall perform their functions according to the timelines mentioned in the Implementation Plan (para 6 refers) while ensuring continuity of operations, smooth revenue collection without any disruption for the remainder of the fiscal year and causing minimal dislocation of officers & offices in the transition process.

(c)   FBR shall be the administrative secretariat of the I&ADC and its subcommittees. Member Admin FBR shall provide requisite secretarial support, relevant information, and official record to the I&ADC and its subcommittees, as required by them.

(d)   The Minister of Finance and Revenue may change the composition of the I&ADC or any of its subcommittees as deemed appropriate.

(e)   The Finance Minister shall be the final authority in relation to the functioning, jurisdiction or resolution of disputes arising out of the work of I&ADC or any of its subcommittees.

6.   Implementation Plan (with Emphasis ours in para IV, which are almost in line with KCV of TLQC 2628 in trail)  

7.  Tight Deadline

Considering the above Table, Kashmir & Election day Holiday and Saturday & Sunday, the very tight deadline for the above matters is 20.2.24 and considering para IV.2 & 4.3, it appears that whichever party wins the election, it will not affect the Restructuring Plan.

8.   Further Details & Services

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Advisory, Statement or Return Filing or Review services, or related accounting matters like the above, please feel free to email Mr Amsal at amsal@786tax.com with CC to info.kasbati@professional-excellence.com. Your Goodself may continue to get other services from your current Tax & Legal Advisors.